Local.com Management Discusses Q3 2010 Results – Earnings Call Transcript

Nov. 5.10 | About: Local Corporation (LOCM)

Local.com Corp. (NASDAQ:LOCM)

Q3 2010 Earnings Call

November 4, 2010; 04:30 pm ET

Executives

Heath Clarke - Chairman and Chief Executive Officer

Ken Cragun - Interim Chief Financial Officer

Bruce Crair - President and Chief Operating Officer

David Castle - Associate Vice President

Analysts

Jeff Rath - Canaccord

Jon Hickman - MDB Capital

Corbin Woodhull - Merriman Capital

David SaoMarcos - Financial Advisers of America

Operator

Good day, ladies and gentlemen, and welcome to the Third Quarter 2010 Local.com Corporation Earnings Conference Call. My name is Eric, and I'll be your operator for today. At this time, all participants are in a listen-only mode. (Operators Instructions) As a reminder this conference is being recorded for replay purposes.

And I'd like to turn the conference over to Mr. David Castle [ph] Associate Vice President. Please proceed.

David Castle

Thank you and good afternoon. It is my pleasure to welcome you to Local.com's third quarter 2010 financial results conference call. With me today, are Local.com's Chairman and CEO, Heath Clarke; President and Chief Operating Officer, Bruce Crair; and our Interim Chief Financial Officer, Ken Cragun.

The executive team will discuss our financial results for the third quarter 2010 and our outlook for the fourth quarter and fiscal year 2010. At the conclusion of their prepared remarks, we will open the lines for questions. I would like to bring to everyone's attention that today's comments include forward-looking statements within the meaning of Section 21-A of the Securities and Exchange Act of 1934, as amended.

These statements are subject to risks and uncertainties that may cause actual results and events to differ materially from those expressed in the forward-looking statements. These risks and uncertainties will be outlined at the end of this conference call and are also detailed in Local.com's filings with the Securities and Exchange Commission.

Forward-looking statements made during today's call are only made as of the date of this conference call and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Before turning over to Heath, it is important that I mention that we use non-GAAP financial measures in evaluating our financial performance, specifically the non-GAAP financial measure of adjusted net income.

Please refer to the press release we issued today for how we define adjusted net income and the reasons for using that non-GAAP measure, as well as a detailed review of our third quarter results, including the corresponding GAAP financial measures and a reconciliation of our non-GAAP financial measures to GAAP financial measures.

To comply with SEC's guidance on fair and open disclosure, we have made this conference call publicly available via audio webcast. Through the Investor Relations sections of our website and a replay of this conference call will be available for 90 days after the call. Today's call features shortened prepared remarks in order to spend more time on the questions-and-answers segment of the call.

I'd now like to turn the call over to our CEO, Heath Clarke.

Heath Clarke

Thanks David, before we start, I would like to welcome Ken Cragun, to his first call as our interim CFO, we’re glad to have him on the team. We believe our recent acquisition of OCTANE360 continues to be a game changer for Local.com. As we near our $100 million run rate Local.com is switching gears in order to take full advantage of the continuing competitive benefits of this acquisition.

We believe our business is approaching another inflection point due to the unique high margin products and services we now offer. Our market presence and technology is coupled with the extensive capabilities of the OCTANE platform have created a very new highly proprietary and extremely powerful technology foundation that we believe materially enhances our competitive position within the growing local search industry.

In turn, we expect this will provide us with the basis for sustained revenue and net income growth and margin expansion in 2011. Google recently introduced its Place Page local search enhancement, which we forecast to put increasing pressure on many directory publishers in the form of reduced free search traffic they receive from Google.

This could reduce the value proposition of that directory publishes and also their advertisers because they’ll basically have less traffic to offer their run advertisers. This competitive pressure is occurring at the same time, those advertisers are transitioning billions of dollars from print Yellow Pages to online search advertising.

In order to preserve their revenues, the directory industry must transition their advertiser spend from their print books for their own online ad products all other [Inaudible] in value. We believe Local.com’s new product suite allows the directory industry to do exactly that, we believe we have the right products in the right market, at the right time and this is driving the strong interest we are experiencing not only from directory publishers, but from regional media partners, search verticals and agencies.

As a result, we are heavily focused on leveraging our considerable technology assets as soon as possible. Our flagship Local.com property was relaunched yesterday and according to one industry expert it’s a radical improvement on our owned site. Our network business now has a record number of sites due to our entrance into the domain segment and the OCTANE360 transaction became accretive the whole two quarters ahead of scheduled, let’s speak into more detail.

O&O revenue was up 16% year-over-year and remained about half of our total third quarter revenue, O&O traffic was up about 15% over the year ago period and organic traffic and site monetization was about flat over the year ago period. Our goal for our O&O business is to increased organic traffic and we have two key strategies to achieve this.

The first is through the additional content on Local.com oriented towards our target Soccer Mom audience and present this information by a greatly improved user experience so that these household managers spend more time on our site and come back more often. Consistent with that goal, I’m very pleased to report the relaunch of our flagship property yesterday.

This was the largest project in our history and our team worked tirelessly over the past nine months to deploy our best site ever in a world class local side search site. I want to thank them for an excellent job and for all their efforts and great execution. Our flagship property has an entirely new look and feel, over 800 articles covering topics such as health and wellness, food, shopping and household, the many new enhancements Bruce will cover in a moment. Maybe you haven’t been in our site in the last few days I’ll encourage you to check it out.

The second strategy is to grow organic traffics through the addition of new local website, such as torranceeyedoctor.com. We currently own over 20,000 local websites and expect to growth that in future periods. Each of these sites is coupled with unique content from our OCTANE expert’s content marketplace. And search to extend our online footprint into location and category specific information. Each site offer, represents inventories for our new exact match products, which we expect, will be sold by our channel partners.

Moving that, excuse me, to the network, third quarter network revenue is $6.8 million over doubled the year ago period and about 30% of total revenue. Our network growth strategy is to add more sites and allow more products across these site. Our OCTANE platform allows us to efficiently add and manage large volumes of local website as well as develop, manage and publish proprietary content to those sites in order to grow organic traffic.

For a better clarity going forward, we’re going to describe our network in two ways, non-domain network and domain network. Our non-domain network is comprised of regional media and XML partners and this is up sharply to well over 1000 sites today. Our domain network is comprised of third party local websites that are hosted and managed on our OCTANE platform. The domain network is a new product and today numbers over 80,000 third party sites, about double the prior quarter.

As with our own sites, each third party site also represents inventory for our exact match products, which we expect will be sold by our channel partners. Moving now to sales and ad services for the third quarter, SAS revenue is about $4 million and double the year ago period. SAS remained about 18% of total revenue and we ended Q3 with over 60,000 subscription customers. Our SAS bulk subscriber acquisition strategy, continues to perform well.

On future, however, it’s clearly in our exact match suite of proprietary ad products, powered by OCTANE360. As a result of our early wins leveraging the OCTANE platform and solid interest from potential channel partners during the third and fourth quarters, we suspended bulk subscriber acquisitions in order to focus all our SAS resources on OCTANE, because the revenue and margin potential is significantly higher.

As a result, we are projecting revenue from our existing subscribers to decline at a predictable rate. As exact match channel sales ramp, we expect new sales revenue to quickly offset the older sales revenue and return our SAS business to growth mode. Our goal during Q4 and Q1 is therefore to develop a channel sales infrastructure and move as many of our channel partners as possible through negotiations and contracts and into deployment.

This process is moving on nicely right now, but it’s all brand new, so we’re taking a conservative view point. We caution everyone not to expect material sustained revenue contributions from the sale of our new ad products until the second half of 2011. So we’re hopeful that our present efforts will result in earlier successes like those delivered in Q3.

Bruce will now comment on our new site and OCTANE integration.

Bruce Crair

Thanks Steve. As Steve mentioned, this quarter we’ve focused our resources on two primary areas. The launch of the new Local.com site and the integration and sales of OCTANE360 products we built the new site to appeal for our core demographic project the Soccer Mom or as we think of them, the household manager women from 25 to 45 with kids at home.

This demographic is responsible for 89% of America’s bank accounts, 80% of healthcare decisions, and 50% of do-it-yourself projects and consumer product purchases. In addition, we spent 85% of the household budget within 20 miles at home, and service the captive audience, the directional targeted advertising at the hyper local, regional and national level.

When you visit the site, you’ll notice that we’ve added substantial amounts of contents targeted to household managers, including one of the largest sources of coupons on the net, information about health and wellness, food and restaurants, family activities and fun and much more. We launched the site with over 800 informative articles on many different subjects and we’re trying to increase our content over time.

Note that the articles on Local.com were sourced from our OCTANE experts’ network, that gives you a sense of high quality of content we’re able to develop on our platform. We even made using online coupons easier by helping our users connect a specific coupon to their grocery store royalty card. This allows the coupon to be recognized and applied at the register without even have that printed out or show it to anyone.

We’re branching out into other content categories as well as deepening the content in existing categories. Our intend is to provide a site that our users visit more often for everyday information, and this in turn offer some opportunity for them to connect with local advertisers.

Now to OCTANE360, we announced in late September that we’ve signed an agreement with one of the major directories to setup a private label network powered by OCTANE360. We’re very excited about this event, because it’s early validation of this acquisition. Our exact match and related products have greatly expanded our product suite. The price points from about $100 per month to many thousands of dollars per month, with even greater value provided to our advertisers.

Even more exciting, is our ability to private-label these products for our partners, enabling our partner with a direct sales force to offer these to their advertising customers under their own brand. Our OCTANE360 product platform is highly scalable, unique in its integration and ease of use and one of the only sets of product with these capabilities on the market today.

We anticipate offering the OCTANE360 suite of products to several more partners over the next two months and we believed these products will show important growth in revenue and margin for us in 2011. We’ve been selling our product site Exact Match products in our own call center for a couple of months with good results.

Custom content, developed for each individual advertiser, through the OCANE experts network. It is placed on our individual website, with opportunities from new generation, product display and sales, questions and answers capabilities and much more for the advertiser and for their customers. We also offered Single Site exact match packages that include web hosting and we are planning to test market this product to our current web hosting customers to see how effectively we can convert those customers to our new platform.

All of these products, offer opportunities for growth in revenue, as an example of this growth the average first month transaction price through our [Inaudible] has increased by about $100 to $350 from the third quarter alone and its still rising. As we announced mid October, Ken Cragun has been named interim Chief Financial Officer. Ken has served as the back bone of the company’s finance operation since April 2009, and we are very pleased to have him step up to this role. Ken?

Ken Cragun

Thank you, Bruce. And thanks to everyone who has joined us for the Q3 2010 earnings call. Once again we had an outstanding quarter, in Q3 we achieve revenue of $22.5 million at record adjusted net income of $4.6 million or $0.27 per share beating our prior record adjusted net income by $1.1 million or 33%. We achieved higher gross margins this quarter from sales of high margin OCTANE360 products and services.

Cost of revenue in Q3 was $10.7 million or 48% of revenue, down from 57% of revenue in Q2. Sales and marketing expense in Q3 was $4 million up 2% from Q2. General and administrative expense in Q3 was $2.7 million, which was up about $450,000 from Q2 primarily due to separation cost connected with our former CFO.

Research and development cost in Q3 were $1.5 million or 6.7% of revenue up from $1.1 million or 5% in Q2. We’ve increased our investment in R&D, including investments in capitalized website development cost in connection with the redesign of our new flagship site as well as improved search technologies. Amortization expense increased in Q3 to $1.6 million from $1.5 million in the prior quarter.

During Q3, we realized that $1.8 million for $0.11 per share warrant valuation benefit based on a Black Scholes Model that takes into account among other things the trading price of our common stock. We are pleased to report that in Q3 we achieved record GAAP net income of $3.7 million or $0.22 per diluted share with 17.2 million diluted shares outstanding. This compares to Q2 GAAP net income of $1.2 million or $0.07 per diluted share with 17.3 million diluted shares outstanding.

As per cash and liquidity, during Q3, we generated over $1 million of cash from operations, we advanced $4 million on the line of credit to cover cash paid for the OCTANE360 acquisition $3.3 million of cash was used for capital expenditures including $2 million related to investments in our technology infrastructure and capitalized website developing costs.

We also purchased $1.2 million of our common stock under the previously announced stock repurchase program. Looking to Q4, we expect revenue to be between $22 million and $23 million with adjusted net income of $0.20 to $0.21 per diluted share assuming 17.5 million diluted shares outstanding. We expect fourth quarter adjusted net income margins at about 16% of revenue.

We now project 2010 adjusted net income to be slightly higher at $14 million to $14.3 million or $0.83 to $0.84 per diluted share. On slightly lower revenue for the full year at $86 million to $87 million, which as the mid point represents a 54% year-over-year growth.

I’ll now turn the call back over to Heath.

Heath Clarke

Thanks Ken. According, to compete.com, Local.com’s flagship property is now number one in the directory segment of local search. We have passed every directory property in the industry in the five years since launched and we are very excited about the next five years.

2010 was a year of investment into our products and services in order to expand and differentiate our technology platform and product suite and to build our came in infrastructure, expand relationships within our sector and enter new markets. We have already begun to see an early return on those investments and we are hopeful that the profits achieved during Q3 are an indication of the margin inflection, we expect in 2011.

I would now like to open up the call to Q&A. Moderator?

Question-and-Answer Session

Operator

(Operators Instructions) And our first question is coming from the line of Jeff Rath from Canaccord, please proceed.

Jeff Rath – Canaccord

Great. Thanks. Hi guys, just a few questions. If I could start on the SAS business, just expanding on something here. The press release says that you acquired 9000 subscribers. Is that a separate transaction from the one that was filed, basically the last day of Q3? Or is that the closing amount of that previously disclosed transaction? Thanks.

Ken Cragun

It’s the closing amount of the previously disclosed, yes.

Jeff Rath – Canaccord

Okay, okay. Great. Now, I think with Bruce, Bruce you shared this statistic and I think you, it’s not quite an awful statistic, you kind of gave some color around first sale subscription trends going from, sort of a 100 to 300. Can you expand on that a little bit? Is that, I’m assuming that’s just, is that cross-selling success that your telesales is having? Or are those new sales? Can you expand a little bit? That seems like a pretty impressive sort of ramp in increased value.

Bruce Crair

Sure Jeff. So let me be specific about it. This is the first month sale price. So, for instance, our Exact Match product retails for $1795 for the first month installation fee and then $495 a month thereafter. So what I was saying was that, the average first-month sale price jumped from about $100 to over $350 in between June and September of this year. And it’s still going up, as we are selling more and more Exact Match. And these are new sales, these are not conversion sales.

Heath Clarke

And just to add a little cover to that, so during the third quarter, we began a test sale of Exact Match, obviously after the close of the acquisition transaction. And by the end of the quarter or kind of coming into the beginning of the fourth quarter, that sales team switched to selling Exact Match only with the potential kind of what we call tele sales they’ve been on the phone and then advertising, and doesn’t want to purchase Exact Match. And then, they also try to sell them local premium products.

But every time as that Bruce said in his prepared remarks, we expect that average sale price to go up, just because there’s such a dramatic difference between the price points for the first month for Exact Match versus our prior products.

Jeff Rath – Canaccord

Great. And then just a question on OCTANE360. You disclosed, I guess, an unexpectedly early sale with one of your channel partners. I am assuming that revenue fell into the SAS bucket, and I’m assuming is that where we’re going to see that revenue build as you roll that product out?

Heath Clarke

No, that fell into the Network bucket. It depends on the type of product or bundle in which we are selling that. As I’m not sure how it’s described in the prepared remarks, anyway it’s a private label network. So as a consequence of that, that would fit within our Network business unit.

If it’s a simple sale than Exact Match product, that will fit in SAS going forward. So, all individual sales of ad products specifically will be within the SAS business unit. But if we do and we do anticipate doing more kind of private label Network sales, then it will all reside within the Network business.

Jeff Rath – Canaccord

Okay, just a couple more, but I’ll just take one more question and then jump in the back of the queue here. Heath, you talked about sort of your intentions now to move sort of your emphasis away from bulk subscriber acquisitions in the SAS and now really focus on selling OCTANE360 and Exact Match.

How do we think about that potential impact sort of on margins, I mean, you’ve given us some general commentary, given us fourth quarter guidance and some general commentary for further expanding margins. But it seems like that could be a little dicey in that business, your current subscriber base business still is churning and OCTANE, at least the early sales, seem kind of lumpy. So is there some risk that we could see some volatility to margins as a result of sort of your change of emphasis here?

Heath Clarke

Sure. Just to clarify, the lumpy piece is really not related to the ramp of our channel sales. So just to be clear that’s a very different kind of product, in that case we’re creating a private label, basically a private label website network. You know that our partners then sell into or we sell into on behalf of them.

But as it relates to the transitioning SAS and remember that fits on the Network side. So as we look at SAS, what’s SAS doing? Well, it’s serving a bunch of customers that we bill or at least recognize them to revenue $15 to $25 per month versus a single sale the five site Exact Match product is $500 per month. So that’s 20 to 30 times the value to us in terms of revenue.

And so that’s number one, that’s significantly higher revenue or ARPU. Margin is very, very high on the Exact Match product. But the price point is also high. And what that allows us to do is to present this as a channel sales capable product. In other words a product that can be sold through somebody else’s sales force, because there’s enough margin in it to incent everybody down the path.

There isn’t that kind of margin or incentive capability with a $15 to $25 a month product. $500, absolutely. And so what that does is, that it opens up our ability to develop a channel sales strategy and we’re talking about Yellow Page publishers and four leading Yellow Page publishers having around $10,000 feet on the street sales force. And that, our product, we believe is appealing to that – the different feet on the street sales forces that are a real asset to the directory publishers.

And what we’re trying to do is bring them the products that sell for their existing and potentially for their future needs and ultimately allow them to capture some of those transitioning ad dollars with their own product on a private label basis, on their own brand as well.

Jeff Rath – Canaccord

Got you. Thanks very much.

Operator

Your next question comes from the line of Jon Hickman from MDB Capital. Please proceed.

Jon Hickman - MDB Capital

Hi, can you hear me?

Heath Clarke

Yes, we can.

Jon Hickman - MDB Capital

Okay. Heath, so can you give us some general idea of how many OCTANE customers you have? Since you’ve been selling it for a couple months now? I know it’s not a lot, but.

Heath Clarke

Sure. I was waiting for the follow-up question. But the answer is yes, we could, but we’re not going to get. It’s very early days. I mean, literally we’re basically out of the first quarter. We’ve only been selling this product with our own sales force since about August. So we don’t want to publish any early numbers, we don’t think that they’re going to be meaningful.

As I mentioned earlier, this is a channel sales strategy. So rather than looking at the number of near-term customers and as I said we would caution you to not to extrapolate too wildly from what happened in Q3, at least in the near-term. It’s a channel sales strategy. So what you’re going to be looking for is, us announcing deals of channel, basically channel sales deals. That’s what is important.

Jon Hickman - MDB Capital

Yes, I get that. But could I get you to reiterate, you said that every, like in Exact Match, five site deal is worth about 20 to 30 of your bulk hosting customers, that we can say?

Heath Clarke

Yes, that’s right. So if you look at, excluding the upfront fee, which is significantly higher, yes, you’re talking about $15 to $25. That is worth 20 to 30 times an existing subscriber.

Jon Hickman - MDB Capital

So that could go a long way to overcoming the churns from the bulk customers?

Heath Clarke

Absolutely. Obviously, we wouldn’t have to sell that many of those units with our internal tele sales force to cover that.

Jon Hickman - MDB Capital

Okay. And then with the statement that your first month’s transaction price is still going up from the $350, it would indicate to me that you’re being successful, even if it’s not a large channel?

Heath Clarke

Yes. We have had good results from our internal tele sales force over the last 90 days and we’re very encouraged by the sales that we’ve been able to achieve and as I said, I think that average sales price will continue to go up.

Jon Hickman - MDB Capital

Okay and then just one more from me. The kind of flat guidance for Q4 that’s related to your normal seasonality that you just kind of pullback on your keyword stuff and during the holidays, because it gets really sensitive, right?

Heath Clarke

Yes. So there is pieces or three revenue streams of the business and O&O ,we don’t pullback so much as everybody else kind of stepped it up in the fourth quarter in terms of their end-of-year spending. So, our SEM, we don’t match that spend. We kind of, we just sit tight and that’s definitely seasonality for us in Q4. Q1 is our strongest quarter, because everybody spent their budget in Q4 in our existing bids, therefore drive more traffic. The Network business, we anticipate will be up in Q4, but for reasons we just discussed, SAS will be down slightly in Q4. So, overall, about flat.

Jon Hickman - MDB Capital

Okay, thanks.

Heath Clarke

Thanks, Jon.

Operator

Your next question comes from the line of Corbin Woodhull from Merriman Capital, please proceed.

Corbin Woodhull - Merriman Capital

Hey guys. Thanks for taking my call. Most of my questions have been answered. But just wondering if you’ve seen any impact from the search alliance, the Yahoo and Microsoft? And then a follow-up, do you plan on doing any additional acquisitions of webhosting portfolios? Thanks.

Heath Clarke

Sure. So, the search alliance is a great question actually. Yahoo is one of our biggest partner representing about 50% of our revenue and so the search alliance is a very big deal for us. It also represents risk to us in the fourth quarter, which is one of the reasons why you see our range is wider than it normally is. We believe we’ve allowed for the potential risk with respect to the search alliance.

So remember the search alliance overall is expected to yield higher bids and more relevant coverage. That’s not going to be right out the gate, but the search alliance went full on about - late October anyway and so we are still gathering data on that. But directionally, it looks okay for us and no negative consequences at this point. But still represents risk to us in Q4. As far as bases, no. As I mentioned in this call, I mean the press release, we suspended further base acquisitions for the foreseeable future.

Corbin Woodhull - Merriman Capital

Got you. Thank you.

Heath Clarke

Thanks Corbin.

Operator

(Operators Instructions) I have a question coming from the line of David SaoMarcos, Financial Advisers of America, please proceed

David SaoMarcos - Financial Advisers of America

Hello Heath. You indicated on the call there that you guys did purchased shares in the open market during this past quarter as per your buyback program. Will that buyback program continue in the fourth quarter? Do you guys get some good prices out there in the spec in the low 3s or just 3s? How you’re feeling about the buyback at this pricing? Thanks.

Heath Clarke

We can’t comment in terms of the price. We did purchased $1.2 million. I think we announced that the purchase it is up to $2 million worth of stock based on conditions that we didn’t disclose. Obviously, I can’t disclose those right now. For obvious reasons, we can’t talk about what the conditions might be. But we spent $1.2, that’s $800,000 more of those conditions on that.

Operator

At this time, I’m showing no further questions. I would like to turn the call back to Mr. Heath Clarke for any closing remarks.

Heath Clarke

Thanks everybody for being on today’s call. I’d like to turn the call back over to David for final disclosures.

David Castle

This conference call contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934.

Words or expressions such as anticipate, believe, estimate, plans, expects, intend, projects, forecast, potential, feel and similar expressions and phrases are intended to identify such forward-looking statements.

Any forward-looking statements are based on the beliefs of our management as well as assumptions made by and information currently available to our management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to our ability to monetize the Local.com domain.

Our ability to incorporate our local-search technology, our ability to market the Local.com domain as a destination for consumers seeking local search results, our ability to grow our business by enhancing our local-search services including through businesses we acquire, the possibility that the information and estimates used to predict anticipated revenues and expenses associated with the businesses we acquire are not accurate, difficulties in executing integration strategies or achieving planned synergies, the possibility of that integration costs and go-forward costs associated with the businesses we acquire will be higher than anticipated.

Our ability to increase the number of businesses that purchase our subscription advertising and other business products, our ability to expand our advertising and distribution networks, our ability to integrate and effectively utilize our acquisition technologies, our ability to develop our products and sales, marketing, finance and administration functions and successfully integrate our expanded infrastructure, as well as our dependence on major advertisers, competitive factors and pricing pressures, changes in legal and regulatory requirements, and general economic conditions.

Any forward-looking statements reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this paragraph. Unless otherwise stated, all site traffic and usage statistics are from third-party services providers engaged by the company.

Our annual report on Form 10-K, subsequent quarterly reports on Form 10-Q, recent current reports on Form 8-K, and other Securities and Exchange Commission filings discuss the foregoing risks as well as other important risk factors that could contribute to such differences or otherwise affect our business, results of operations, and financial conditions.

The forward-looking statements made on this earnings call can speak only after the date they are made. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. This concludes our call for today. Thank you for your interest in Local.com.

Operator

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.

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